Euro Price Outlook: EUR/USD Technical Breakout to Offer Guidance

Euro Technical Price Outlook: EUR/USD Weekly Trade Levels

• Euro updated technical trade levels & sentiment – Weekly Chart
• EUR/USD pulls back from technical resistance – broader focus constructive above 1.0778
• Immediate advance vulnerable into monthly open resistance at 1.1029

Euro is trading lower against the US Dollar this week with EUR/USD down 0.5% in New York trade on Wednesday. The Euro recovery has pulled back from near-term resistance and while the broader focus remains weighted to the topside, an outside day reversal today may suggest more weakness before a larger resumption higher. These are the updated targets and invalidation levels that matter on the EUR/USD weekly price chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Euro trade setup and more.

Euro Price Chart – EUR/USD Weekly

Chart Prepared by Michael Boutros, Technical Strategist; EUR/USD on Tradingview

Notes: In last month’s Euro Weekly Price Outlook we highlighted a critical resistance confluence at,“1.1445/71- a region defined by the objective 2019 yearly open and the 38.2% retracement of the 2018 decline. Look for a bigger reaction there IF reached with a close above needed to suggest a more significant low was registered last month.” EUR/USD briefly registered an intraday high at 1.1495 before reversing sharply with the subsequent decline rebounding off the 2017 March high-week reversal close at 1.0657- now key support.

Initial support steady at 1.0778 with a breach above 1.0976 needed to fuel the next leg higher in price. Key resistance now stands at the 61.8% Fibonacci confluence zone at 1.1167/87 – a breach / close above this threshold would suggest a more significant low was registered last month with such a scenario exposing subsequent resistance objectives at the June 2019 high-day close at 1.1367 and 1.1445/57. A close below 1.0657 is needed to mark resumption of the broader downtrend towards the 2017 low-week close at 1.0532.

Bottom line: The immediate focus is on a break of the 1.0777-1.0977 range for guidance. From a trading standpoint, look for downside exhaustion while above 1.0657 IF price is indeed heading higher with a breach above 1.1187 needed to alleviate downside pressure heading deeper into the second quarter. I’ll publish an updated Euro Price Outlook once we get further clarity on the near-term EUR/USD technical trade levels.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Euro Trader Sentiment – EUR/USD Price Chart

• A summary of IG Client Sentiment shows traders are net-long EUR/USD - the ratio stands at +1.09 (52.22% of traders are long) – neutral reading
• Long positions are5.57% lower than yesterday and 13.92% lower from last week
• Short positions are 4.44% lower than yesterday and 2.85% higher from last week
• We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. From a sentiment standpoint, the recent changes in positioning warn that the current EUR/USD price trend may soon reverse higher despite the fact traders remain net-long.

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Previous Weekly Technical Charts

• Mexican Peso (USD/MXN)
• Gold (XAU/USD)
• Sterling (GBP/USD)
• US Dollar (DXY)
• Crude Oil (WTI)
• Australian Dollar (AUD/USD)
• Canadian Dollar (USD/CAD)
• S&P 500 (SPX500)

--- Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex